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Sale of BNFL Assets

Volume 486: debated on Monday 12 January 2009

Further to the previous Secretary of State’s announcement on 16 July 2007, Official Report, column 1WS, regarding the planned sale by British Nuclear Fuels Ltd (BNFL) of its one third stake in Atomic Weapons Establishment Management Ltd (AWEML), I can confirm that agreement was reached on 17 December 2008 to sell the one third stake to a UK subsidiary of the Jacobs Engineering Group, subject to clearance under EU merger control requirements. The terms of the deal remain commercially sensitive.

Jacobs is already working as a key strategic partner to AWEML and their acquisition of BNFL’s one-third stake followed a competitive process conducted by BNFL in close consultation with the BERR and the Ministry of Defence (MOD). HMG is satisfied that the sale of BNFL’s one third stake to Jacobs achieves the dual objective of maximising shareholder return from the stake while ensuring that a strong AWEML consortium is in place under Government owned contractor operated arrangements to manage the enduring performance of AWEML’s subsidiary, AWE plc, which is responsible for the day-to-day operation of AWE itself and for meeting the requirements of the customer, the MOD. The MOD is satisfied that Jacobs meets the relevant security requirements.

Strategic requirements and the UK deterrent programme are set by the UK Government. UK nuclear forces will remain fully operationally independent; decision-making and the use of the system remains entirely sovereign to the UK. All AWE sites and assets remain in Government ownership, as they have done since AWE was first contractorised in 1993. The MOD continues to hold a special share in AWE plc, which would allow the MOD to assume control of AWE plc, should that become necessary.